Mumbai: The Indian rupee on Wednesday held steady at 39.96/97 as against the US dollar in morning trade after it pared initial gains due to the central bank intervention to prevent the currency's surge.

Dealers said public sector banks bought dollars on behalf of the central bank after the local currency resumed stronger by three paise at 39.93/94 a dollar from its overnight close of 39.96/97 a dollar.

The rupee later fell back and was quoted at its last closing level of 39.96/97 a dollar in late morning deals.

Traders were cautious as the Reserve Bank of India continued to intervene in support of the dollar, they added.

Meanwhile, the dollar strengthened against key rivals on Tuesday in overseas markets after data showed rising inflation and improved manufacturing activity, an indication the Federal Reserve may not lower US interest rates further.
Source : PTI